By Tamawa Desai
LONDON, Oct 15 (Reuters) - World stocks edged down from near two-year highs while the dollar held near a 10-month low on Friday as investors sought clues from the U.S. Federal Reserve chief on the extent of expected U.S. monetary easing.
Fed Chairman Ben Bernanke has the opportunity to confirm or or temper market expectations of more asset purchases by the Fed at its next meeting on Nov. 2-3. He is scheduled to speak on central bank options in a low-inflation environment at 1215 GMT.
"The markets are waiting for Bernanke, they want to hear when the quantitative easing will begin and how much there will be. If they don't they will be disappointed," said Giuseppe-Guido Amato, strategist at Lang & Schwarz in Frankfurt.
The MSCI world equity index fell 0.2 percent to 317.01 after it had hit the year's high of 319.45 on Thursday, its best showing since shortly after the collapse of U.S. investment bank Lehman Brothers in September 2008.
The index has risen nearly 15 percent since late August when markets began to focus on the prospect of the Fed renewing its quantitative easing programme.
U.S. stock futures fell 0.2 percent, after Wall Street closed lower on Thursday. The FTSEurofirst 300 index was also little changed.
U.S. Treasury yields edged down, with the 10-year Treasury at 2.4860 percent and the two-year yielding 0.3710 percent.
Market players were also watching U.S. consumer inflation and retail sales data at 1230 GMT, as softer readings would add to the case for looser monetary policy.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.1 percent at 76.516.
"Bernanke should give some indication of the shape and size of the stimulus. If either that or the inflation numbers disappoint then the dollar will definitely go lower," said Ankita Dudani, currency strategist at RBS.
The euro was just short of its highest level in more than eight months against the greenback, while the Australian dollar hovered close to a 28-year peak.
The dollar dipped 0.3 percent to 81.20 yen.
It hit a 15-year low of 80.88 yen on Thursday, only about 1 yen above its record low of 79.75 yen set in April 1995, and the market remains nervous about the possibility of more Japanese intervention to curb yen strength.
Currency traders focused on the U.S. Treasury Department's semi-annual report on currency practices, particularly whether it will label China as a currency manipulator, a move that could throw a wrench into Sino-U.S. relations.
The report's backdrop includes perceived moves by some countries to debase their currencies to bolster their economies, and it preceeds a Group of 20 finance ministers' meeting in South Korea from Oct. 22.
Gold held steady near $1,380 an ounce but was still on track to post its biggest weekly gain since mid-June. (Additional reporting by Jeremy Gaunt, Joanne Frearson and Jessica Mortimer; Editing by Catherine Evans)